2. Expanding Use of Data and Advanced Analytics

Over the past 18 months, the Digital Banking Report has seen a growing gap between the organizations that are embracing the power of contextual insights and the potential of digital transformation vs. those that continue doing things the same way they have in the past. There is no reason to see this gap narrowing in 2018.

Best-in-class financial institutions will apply advanced analytics and artificial intelligence to increase automation, improve personalization, reduce costs, enhance the customer experience and even assist with compliance. The potential of advanced analytics grows exponentially over time. Each iteration, additional data source and performance measurement results in learning that enhances the accuracy of the predictive models. It also allows organizations to refine data sources as opposed to simply adding more and more data.

Finally, with each iteration, predictability goes up while costs can go down, improving marketing efficiency. From the customer’s perspective, the messaging in more “on target,” improving the customer experience, satisfaction and lifetime value.

According to David Gerbino, Principal of @dmgconsulting, “Financial institutions that effectively leverage data and advanced analytics across the enterprise will be in a position to capitalize on newer technologies such as machine learning and automation. Those firms who fall behind will need to quickly overcome barriers that are preventing them from enjoying the benefits of advanced analytics or they will find themselves too far behind to catch up.”

“Many banks have built their core operations on fragmented systems aligned to products. This has distributed customer data across multiple platforms, and banks recognize that they cannot use AI effectively on data spread across the business. As a result, organizations will develop strategies for building an Enterprise Data Architecture in 2018 which rationalizes and cleanses their fragmented data stores.”

“2018 we will see tech- and data-driven leaders being appointed into c-level positions in the financial services industry. This will occur because advisory board, shareholders and established CEOs recognize that the new era of customer-centric digital ecosystems demand leadership with a digital and tech-driven mindset.”
– Dr, Robin Kiera, Fintech, Insurtech, Digitalization Speaker and Influencer

“A new generation of AI solutions focused on the effectiveness more than on the efficiency. Tools able to evolve from the pull conversation to the push sales. The proactive offer of the right product at the right time with the right message, as was done physically by the best sales for decades. Something able to address the body of the customer base and not only the long tail of the most rational person.”
– Matteo Carbone, Founder and Director at Connected Insurance Observatory

“Virtual replicas will move beyond industrial applications and into financial services in 2018. A digital twin will not only propose an action plan for a human to review/do, it will intervene on its own. As cloud-based processing power rises and tools become more operative, running behavioral digital twin simulations will become more prevalent.”

“In 2018, organizations will embrace more automation and AI to provide a better experience for customers across digital channels and to empower employees with the tools and knowledge they need to improve their performance.”
– Jenni Palocsik, Director of Solutions Marketing at Verint

“AI will become a necessity for financial services to deliver better experiences, lower costs, reduce risks and increase revenue – providing a competitive edge. Most firms will need to evaluate a buy/partner decision to deploy solutions such as chatbots, biometrics, fraud and voice or else fall further behind.”
– Dennis Gada, Regional Head, Financial Services at Infosys

“Artificial Intelligence (AI) will start to bear fruit, supporting more complicated use cases for older adults such as decumulation and financial planning for longevity. The combination of advanced analytics, Internet of Things (IoT), and big data will allow banking to be more seamlessly integrated into our daily routine, transforming voice into the new UI.”

“Anticipatory UIs will grow as a result of natural language processing and AI, prompting a shift in customer interaction from pull (the customer having to trigger the interaction with the bank), to push (the bank initiating the interaction in a non-invasive way).”
– Paolo Barbesino, SVP and Head of Digital at Unicredit

“With many organizations searching for deposits, those that do not have a sound data-cleansing and enriching process, combined with a data-driven acquisition and retention strategy, backed by a marketing automation platform, will find themselves on the losing end of 2018. Marketing teams and technology teams will need to be in 100% alignment going into this year.”
– John Waupsh, Chief Innovation Officer at Kasasa

“Data will reach a point of critical mass not in terms of volume, but in organization, collation, correlation and democratic distribution. This will not just empower real time or strategic decision making (“if this, then that”), but also determine long term road maps, capacity planning, customization of products and services for new acquisition and revenue channels, and critically cost management. Data will be the constant atmosphere in which we work and breath, rather than the ‘lake’ or ‘warehouse’ we visit.”

“Many financial institutions will attempt to roll out tools powered by artificial intelligence and many will fail due to a lack of clean and usable data. Leading institutions will focus on getting their data organized, accessible, and clean, building a solid foundation to ultimately win the race toward AI.”
– Matt West, Global Strategic Account Executive at MX

“Banks must continue to gain a deep understanding of their customers or they will fall further behind. Transaction analytics and data categorization are the foundation of all data-driven initiatives. If financial institutions cannot categorize their data and identify the right audience, they will find it difficult to move forward in more advanced areas such as AI, Virtual Assistants and Customer Journey Mapping.”

Jim Marous is co-publisher of The Financial Brand and publisher of the Digital Banking Report, a subscription-based publication that provides deep insights into the digitization of banking, with over 150 reports in the digital archive available to subscribers. You can follow Jim on Twitter and LinkedIn, or visit his professional website.

Comments

1st Trend – Remove Friction from the Customer Journey. Behavioral Economics highlights the insidious impact of seemingly irrelevant factors on the decision-making behaviors of consumers, and friction is high on the list. But if we are to be better advisors to our customers and members there may be times when a little friction is needed. There are times, for instance, when a little pain (or friction) in the payment process provides for less mindless spending. And most of our members would be better off if they spent less and saved more.